RSM225 Fall 2019 Sahni Class 6 Lecture Outline.pdf - RSM225 Legal Environment of Business CLASS 6 Tort Law(Part 2 Professional Liability Raj Sahni This

RSM225 Fall 2019 Sahni Class 6 Lecture Outline.pdf - RSM225...

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1 RSM225 Legal Environment of Business CLASS 6: Tort Law (Part 2): Professional Liability Raj Sahni This is an outline only. Students are responsible for all assigned reading and lecture content. Copyright ©2019. R.S. Sahni. All Rights Reserved. 1. Professional Liability Area of law pertaining to the liability of professionals (typically to their clients) for "bad" advice or actions Liability can arise under contract or tort or for breach of fiduciary duty Professional is a person with specialized knowledge or skills that clients rely upon. Professionals are usually part of a professional body which licenses them to practice the profession and governs them 2. Fiduciary Duty Where a person is in a special relationship of trust with another (e.g. doctors, accountants, lawyers & their clients), the highest form of duty of good faith (fiduciary duty) is owed to the client Supreme Court of Canada ( Fram v. Smith ) – set out general rules for when fiduciary duty exists: (i) The fiduciary has scope for the exercise of some discretion or power
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2 2. Fiduciary Duty (Cont’d) (ii) The fiduciary can unilaterally exercise that power or discretion to affect the beneficiary's legal or practical interests (iii) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power Typically, breach of fiduciary cases arise when the fiduciary has done something for his/her own benefit and adverse in interest to the client 3. Contractual Duty A professional who has contracted to perform services for a client owes that client a duty to perform those services with due care This is an implied term of contract – i.e. it need not actually be stated in the contract and a written contract is not required
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